Bring Your Questions for a Freakonomics Radio FAQ

A couple times a year, we take reader/listener questions for an FAQ (FREAK-quentlyAskedQuestions) episode of our podcast. We’ll likely put out next FAQ in mid-April, so ask us your questions in the comments section below. Thanks.

All about the health exchanges – Where do you find your own states? What if they ate relying on the Feds? How does one effect a “rebate “? By what mechanism can one compare coverage? All that and more….please & thank you! eaee

I own two business in a metro market. More and more, we are being extended on payments from large businesses including contractors, manufacturers, and retailers…. not the normal 30 days, but some as long as 120 days. Think it would be interesting to see the real cost and effects these extensions of payments has on business and the economy. What are these large cash cows doing with this small amount of cash they are hording?

I have heard this used often however I tend to disagree that you can be too smart for your own good. The only example I can think of are Iran Nuclear Scientists being assassinated. Can you conjure up different examples besides persecution?

Speed kills – can you discuss the relationship between highways speed limits and wrecks/injuries. Why does America have such slow speed limits compared to the rest of the developed world (Especially our buddies in the EU), also what is the cost of those slower speeds in terms of lost production etc…

i think that one of ur topics was test forensics: how u can analyze test result data to discern if the results were doctored- have u heard of any such analysis for financial fraud? eg. are there any post hoc analyses of accounting fraud that may help to detect when firms are currently cooking the books?

I hope I’ve found the correct web location to send in a question. I was wondering if there is a Freakonomics spin on the “Where’s George” phenomenon where $1 bills distribution is tracked via a web site.
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Just in case you’re not aware of this, groups of people stamp their $1 with a stamp identifying the bill that it can be tracked and each follower then enters the unique ID stamped on each bill.

So how about it, what can an inquiring freak glean from this data set?

In all your statistical analysis to identify cheating AND experience with horse racing. Given the large amounts of money involved, but relatively few jockeys/owners/trainers, do you think some Triple Crown horse races are fixed?

I think specifically of a 50-1 horse, Mine That Bird, that ran a time faster than came from dead last to pass the entire field on a sloppy track. The horse never won a race before the KD and never won a race after.

I feel a lot of people assume(wrongly?) there is a trade-off between intellectual and social ability. Certainly, Hollywood seems to have jumped on board with the stereotype (Sheldon Cooper, Urkel, Lisa Simpson, etc). I’m often eager to bring up new things I learn from the Freakonomics podcast(and others) in casual conversation. I’d like to know if intellectual individuals alienate themselves or spark interest and engagement in general when it comes to social interaction. Thanks!

I’ve been told from an admitting professor that any GRE below the 85th percentile in math will be thrown in the trash. I can’t imagine there is that much of a difference between an 83 and an 85, so why the brightline?

Why do university economists get paid $100k+ right out of PhD school? What value are they bringing to the university to warrant that kind of pay?

There just aren’t many prefessions where someone under 30 can get paid $100k with any level of education (especially in low cost-of-living states in the South and Southwest regions). So why are economists so valuable?

What would be the economic impact of a cheap, readily available cure for cancer?

Here’s the basic scenario. Imagine that somehow we find a cure for cancer that involves something cheap and simple like a drinking a spinach smoothie with every meal for 5 days. We have entire industries and charities that are geared toward finding cancer cures and treatments. What would be the economic impact if those industries and charities were suddenly out of business overnight?

One reason I ask is because I often argue that there is no clear market incentive to find a cure for cancer. Treatments are expensive and there are repeat customers. That is a nice profit model. A cure would slowly eliminate the customer base for treatment. So, other than altruism where is the incentive for a cancer cure?

But we need to insert a caveat here, which is that we don’t have accurate data on criminal activity. We only know about 1) Crimes which are detected – for instance, how many cases of embezzlement are never discovered? and 2) The people who are charged with crimes – who may or may not have been the ones who committed them.

Are there headline indicators for the needs of the labor market? For instance, if there is a shortage of chemical engineers throughout the U.S. can a student entering college find out about the shortage and plan to study chemical engineering in order to fill such a gap? It seems that many people are unsure of what career path they might take and clear information regarding supply and demand in the labor market might help ease the indecision.

Two totally unrelated questions…
1.) if you had to do a guesstimate of the average world wide income (if let’s say we all turned communist and all the world’s private money was made to be grouped and dividede equally amongst the planet’s residents.), what would it be?
2.) do you guys keep an itemized list of the songs you use for each episode?? I would love to access to that!! You guys pick the best songs from your podcast intro to your fade-out transitions, etc. and every now and again I wish to download one but it doesn’t play long enough for Shazam to recognize it! lol

My husband and I were discussing potential solutions to the US debt problem and wondered if the potential for selling “debt bonds” (a la the old war bonds) would be a potential help. Obviously the interest payout rate couldn’t be amazingly high, however anything that would pay more than general bank investment instruments would be attractive to certain investors, and some would perhaps invest out of a general sense of patriotism in helping the country.
This seems WAY too simple, but you guys are smart and can tell us why this would/would not work.
Fellow App State Alum/Communications major/WASU alum/The Appalachian newspaper alum,
Delana

I’m a medical student and I have found that becoming a physician requires has an astronomical opportunity cost and that incentives to enter the profession are decreasing (tougher admissions, no interest-deferred loans, less residency spots for more graduates). How do you think my observations will affect healthcare in combination with the Affordable Care Act?

Planet Money did a show in conjunction with This American Life on the rise of disability. They point out that disability is the lone refuge for unskilled workers who have no potential jobs as mills and factories close around America. What are the potential economic consequences of just not having government aid to the poor? What programs should we be instituting? Would raising tariffs help us get back low skill jobs?

I’ve been intrigued by Michael Bloomberg’s pursuit of limitations on soft drinks. Have you ever considered a study on the negative externalities of junk food? From an economic perspective would excise taxes be a better response than limitations?

What’s the deal with libraries? They use public funds to give away privately created books, music, and movies. They ostensibly reduce the sales of books (usually after returning a library book, a person doesn’t decide to go out and buy it), yet publishers still love selling to libraries. The libraries in my neighborhood seem to generally be used by people who are interested in using their computers to cruise Facebook. How do libraries exist in the good graces of the private sector?

My parents went to Universal Studios in Orlando to see Harry Potter World. The Entry Fee was $88. The line was very long for the Harry Potter Ride and so they checked into getting a fast pass to bypass the line. The Fast Passes were $60 each, for this ride only!! My Dad, who had a black & white TV until the late 80′s, and a rotary phone until the late 90′s, did not pay this. I would be interested in finding out how they set the price and how many people a day are willing to pay this.

I just took last place in my office March Madness pool. Are there economists tips that I can incorporate into next year’s office bracket pool to maximize my chances of winning? Picking upsets, cinderellas?

I loved your podcast on wine and the fact that its price has no correlation to its true taste (perceived taste obviously is a different story….).

But one thing you didn’t mention was the basic law of supply and demand and the affect that has on price.

But rather than bash you for that omission, I would like your Freakonomics take on craft beer. Because something unique is going on with craft beer prices and supply and demand. Brewers are starting to brew limited edition beers, artificially creating a low supply, which drives up the price of their beer. The price is not only higher in stores, but a sort of black market has cropped up, too. These beers used to be sold at inflated prices on Ebay (not allowed now) and are actively traded (technically illegal) by beer enthusiasts.

In Superfreakonomics you wrote that Intellectual Ventures could create a fleet of devices that could quickly cool the earth with $100-200m in investment and a few years lead time. With increasing evidence that global climate change is leading to more drought, floods, and hurricanes I’d imagine that insurance companies, farmers, and conservationists (fewer claims, more stable yields, and preserved habitats) would be clamoring to fund this technology. Could you provide an update of where progress stands at IV and what barriers exist for this venture?

What do you guys think about states starting to legalize, regulate, and tax marijuana? On one hand, there are potential social ills associated with more drug availability, but on the other hand, this could ease budgetary pressures on state governments at a time when those pressures on very high. Plus, some take the view that marijuana’s current illegal status does not actually do much to decrease consumption. What’s the Freakonomics take on this issue?

I am well aware that my question is incredibly self-centered, but here it is anyway:

Like many grad students, I use public transit and walk to move around. Like many grad students as well, I always have my iPhone with me and listen to music while commuting.

I found out about the Freakonomics podcast maybe a couple months ago and I’ve since switched from listening to music to listening to your program. You will probably agree with me when I say that listening to a radio show is a much more ”active” endeavour than listening to music, which is relatively more ”passive”; I have to pay attention to what you’re saying instead of having music in my ears just so I don’t have to hear the noise the bus engine makes.

I have noticed, however, that this ”active” listening has some drawbacks. Because I actually have to concentrate rather than blankly stare at the person sitting in front of me, I’m having certain issues listening to your podcast and doing the same simple things I’ve done for a while*: getting off the bus at the right stop, looking at both sides before crossing the street, not running into someone who’s walking towards me, etc.

Now here’s my dilemma: I do want to keep on listening to the Freakonomics podcast, but my options are very limited since I can’t listen to it at school, and I’m way too easily distracted to listen to it while working at home (again, the ”active” listening problem makes me terribly inefficient).

I hate trade-offs (and to think I’m a finance student) but I would like to have your input on what my options are: should I keep on listening to your radio show, considering it makes me slightly less ”functional”, should I try to make time for it and do nothing else (even though I have no idea what ”free time” means), or should I stop and go back to listening to music instead?

In the end, I guess I should go with the option that’s making me the most comfortable without having to fear getting hit by a car, but the bottom line is: how would you approach such a trade-off problem?

*I’m assuming I would be having the same problem with any other talk radio show, I’m not holding you accountable!

Can’t help with the getting hit by a car problem, but I think it should be possible to program your iPhone with an alarm that sounds when you’re approaching your bus stop. I believe they have both GPS and accelerometer, so it would be just a simple matter of detecting that the bus is braking when it’s close to your stop.

There are many advocates that support the proposition that college athletes should be paid over and above the scholarship, housing, food, etc. they receive, but I’ve yet to hear any one factor into the equation the value of being featured on prime time television several times a year. If these athletes wanted to showcase their talents on national television, thereby furthering their chances for a professional career, what would they have to pay in order to be able to do that? Isn’t that something worth accounting for?

I am Graduating from High School this May and trying to figure out what to do with my life.
I am going to go to collage in the fall but I am not sure what to study.
Can your decision making coin toss help?

Since people are genuinely fair and pay for bagels and fish on the honor system, why does this not apply to song downloads? Or do most people pay for music? I do, but my students don’t if they can get it for free from their friends or online. Is the payment on the honor system only for smaller businesses where people feel a “personal” attachement to the business or will be inconvenienced if the business disappeared? My students feel that the big music producers can do without their cash. They don’t understand that the artists are getting hurt by their theft. But this attitude is very pervailant with any big business. This mentality that the big business can afford the theft thus it’s ok. Are we only genuinely good to monkeys that play in our playpen and we can see?

Is the generational wage/wealth gap a good or bad thing? Are the younger people of America getting poorer while the older people of America getting Richer. I read that an average person between 18-35 year old in America has about 10k worth of liquitable wealth while an average senior citizen has about 180k worth of liquitable wealth.

I am interested in knowing how the optimum speed limit for a road should be determined. More specifically, where should the lines be drawn between safety, convenience and income? Lets say you have a highway with a speed limt of 55. If you move it up, more people get to their destination faster, but more people die, and maybe less revenue is generated from speeding (or maybe not). If you move the limit down, it takes people longer, but less people die and maybe more revenue is generated. Theoretically, if safety were the only concern, speed limits would all be 5 mph and we’d all go insane. What’s the optimal number of highway deaths in exchange for speed?

If you print more of a currency you make it less valuable. This is true with other things as well. In this age of Facebook have we devalued friendship? What we call “friends” now used to be simply acquaintances. In the past we could rely on friends for favors you would ask no one else for, but I doubt most of our Facebook friends would offer help when we needed it. Have we traded quality of friends for quantity?

Does a body of knowledge exist on the economics of extortion? My hypothesis is that any trends seen in the extortion “markets” will also show up in an examination of the present US healthcare system. In both situations you either pay the man what he demands, or lose your kneecap.

What is the best use of my free time? I feel like I should spend my time reading books and blogs (like yours) in an attempt to educate myself but often end up watching television. Am I really deriving a benefit from reading, or am I just trying to trick myself into thinking I’m more intelligent/sophisticated? What’s your perspective?

This may seem rather general: If nothing was out of bounds, PERSONALLY, what would be the most ridiculous thing that each of you would want to see the hidden side of? Perhaps more specifically, something that appears to be correlation but may actually be causation.

This month’s Car and Driver magazine had an article stating that the ban on Leaded Gasoline resulted in a major reduction in the crime wave. What are your thoughts on the matter? The article seems to contradict the study in your first book which attributed the reduction on abortion legislation.

I would like to hear you guys talk more about taxes. Every time I file my taxes, I feel as though I have been transported back to the middle ages. All the forms and rules (not to mention the loopholes) involved. I also keep imagining the waste devoted to this system – namely, all the bureaucracy required to enforce it and all the people who have devoted their professional careers to understanding this ridiculous system. At this day and age, I find it hard to believe that there is no better way to tax people.

I once heard about the idea of simply replacing all the federal income/corporate taxes with a single little tax on every financial transaction. That seemed like a great idea to me. It is a simple system that would be very (if not impossible) to dodge. I suppose you could even make this system progressive by tying the rate to the volume of transactions. What other great ideas are out there? Would a much better/simpler tax system provide our economy with a real boost?

Over the past 15-20 years, there have been significant increases in (i) the use of pre-employment personality tests, (ii) the percentage of persons qualifying for SSDI awards on the basis of mental illness, and (iii) the incidence of suicide, coincidence or correlation?

Growing up, my dad always claimed that the NBA finals were rigged. Every once in a while I hear sportscasters mention the NBA influencing refs to adjust their calls in order to make games closer. Does the data suggest that this happens?

Although it’s vaguely first-date-ish, do you have any favorite movies, books, or TV shows that are especially accurate their journalistic and economic portrayals and insights? Yes, I am basically looking for movie/book/TV recommendations from two of my favorite multimedia personalities, and no: that wasn’t an attempt to flatter you.

So in video games where you get to create your own character, there’s a process called “Min-Maxing” players sometimes use. The principal is that you sacrifice all other aspects of your character to heighten one specific aspect of your character (like sacrificing all your defense for more offense).
I know this happens in the business world (usually the sacrifice is employee/customer satisfaction, in favor of the bottom line) but I’m not sure if there’s a term for it. Is there?

Hi there. When I was in Catholic school they ingrained in us the concept that living together outside of marriage actually increased the chances of divorce vs if the couple gets married and has never lived together. This was an issue for me not only because I was 1 of 2 jews in the whole school, but also because it does not make any sense. Now as an adult I am glad I lived with my future husband prior to getting married and making the huge emotional and financial commitment. Do you have any data that actually refutes what I learned in Catholic high school?

What is the economic cost of retaining the English system (vs metric system)? Does it result in lower math/ science educational achievement? What will be the cost to convert? What will be the economic benefits?

First off, I am obsessed with the freakonomics podcast. Second, a couple years ago I was lucky enough to get to see Mr. Levitt present at the AEA on after school programs and gun violence, it was an awesome presentation. Third, I’m not sure whether you have already done such a post, but is there really a shortage of scientists? Based on the salary of chemists ($76k per the BLS May 2012) versus the salary of, oh, let’s say economists ($99k per the BLS May 2012), prices don’t seem to indicate a shortage of supply (please excuse my bastardization of economics). What the freak is going on?

On the most recent FAQ on 10/3/13, choosing a hometown was discussed. As a continuation on desirable locations for different demographic groups, has an economic study ever been done tying the desirability of locations like Boston, Chicago, NYC, San Francisco where the limitations of land surrounding the area (at least on one complete side) raises the value of the useable land in proximity to the central city, thereby attracting a specific socio-economic group? Whew!

My point is less available land, higher prices attracting more well off people who then expect or develop amenities to suit their lifestyle.

My question on light of the current political chaos ion the US in regards to democrats & republicans: if you looked at the top 10% of those who hold the wealth in the US, how many are democrats and how many are republicans? Does the ratio change of you look at only the top 1%?

I’ve spent a year traveling around the world. I’ve noticed that the markets are about the same from country to country (covered stalls selling clothes, food, knock-offs, etc.) but the owners of said stalls vary drastically from country to country. In India- it’s all men who are incredibly pushy/”helpful”. In Thailand they are more aggressive than sharks and will scream at you to buy something. In Philippines you say “no thank you” and they say “ok. no problem.” and don’t follow you. In Colombia you walk into a store and the sales girls will follow you/waiting on you hand/foot (trying to be helpful) until you need something/ask them for something.

Part of this is the “Gringo Tax”. They see a white girl and they instantly think money signs. But is there more to it?

(THE QUESTION): Does being pushy sell more than being a relaxed sales person?

I just listened to your podcast regarding donations where you folks were asking the listeners to support the podcast.

You folks raised the issue of bandwidth cost and how it is a large chunk of the cost associated with the podcast. Well, you are in luck! I have lots of bandwidth to give away for free. I am sure most of your listeners have it as well. Why not simply ask all of your listeners to seed the podcast via bittorrent? I’d be happy to donate my bandwidth away. If that sounds to techy for some listeners, you can also make the podcast available on youtube (as an audio track with a little poster art for the video) and let youtube/google pay for the bandwidth.

I have already asked the same question to ‘This American Life’ and ‘On the Media’ but I never got an answer back. Please allow us (the listeners) to donate our bandwidth with bittorrent. Bandwidth costs a lot for you but it is cheap for me. Let me help you out.

Is it possible to determine the economic impact of the National Aeronautics and Space Administration in todays economy, where is it a very small portion of the federal budget? Vs in the 1960s and 70s when it was a much larger portion? What caused the decrease in funding? NASA seemed to be achieving it’s goals and contributing to our lives in a meaningful way.

Is there is a co-relation between parents been graduate and kids doing well (graduating) and if yes how better are the kids of parents who are graduates v/s kids of parents who are not.

Do people who have developed reading habits from their childhood do better than the people who don’t. Are their chances of graduating with better grades, getting better jobs, being entrepreneurs etc more.

I have an uncontrollable, ridiculous, hopefully irrational, fear of going to prison. To put my mind at ease, would you please give us your take on private prisons. Do they actually save tax payers’ money? Is there any evidence for or against the idea that the concentrated lobbying power of private prison owners would lead to longer sentences, more incarcerations, etc. It seems like there might be natural experiments that could shed light on the topic, with various states having different policies regarding private prisons. If I get arrested should I make sure that it’s in Arizona, Texas, Toronto, Mexico City, or Bangkok?

We all love stereotypes, and stereotypically speaking, Democrats are known to raise taxes and redistribute that wealth, while Republicans are known to cut taxes and decrease federal spending. And there’s lots of debate over “givers” and “takers” in the economy. But, has there ever been a look at whether or not states that lean strongly Democratic actually pay more into the economy through taxes or states that lean strongly Republican actually take in more federal aid? For example, a consistently blue state like New York is a net provider to the rest of the country, while a consistently red state like Utah is a net taker from the rest of the country. Is there any correlation here?

I thoroughly enjoy your podcast. I also make use of the Freakonomics movie in an undergraduate research methods class that I teach at a local university. My primary occupation is in law enforcement where I participate in a defined benefit pension plan. My question is tangentially related to the topic of public pension reform which is looming on the horizon.

There seems to be a general perception among police officers that retired public safety workers have a shorter life expectancy than members of the general public. This is typically attributed to shift work, poor sleep patterns, vocational stress, etc. This ostensible deficit in lifespan is regularly proffered as a justification for maintaining the traditional defined benefit pension system (which can be quite generous when compared to retirement plans in the private sector). I’m not convinced that this is true and suspect that my colleagues are unconsciously focusing on a handful of tragic cases that are perhaps more salient than officers who live long beyond their date of retirement. Has the lifespan of public safety employees ever been studied empirically? I would expect that findings would be of interest in the context of economics (maximizing value of lifetime earnings) and would also have implications for the public pension reform debate. Thanks guys!

Why is it municipalities charge by use of water and electricity- but not trash disposal? We all pay the same amount of garbage disposal services and every trash day I see the inequality of some that produce no trash, paying for those that produce excessive trash.

If we wanted to minimize the waste wouldn’t it make sense for us to pay for our waste proportionally? And to promote recycling- charge 1/2 as much for the recycling bins? Why aren’t we doing this?

If the subject matter gives you no return, and the purpose of a college course is to simply get a degree wouldn’t an A or a B in a course be viewed as a waste because there is no return on the additional GPA points and the time spent in garnishing the A or B could have been invested elsewhere where there is a return?

When I was in high school in the mid to late nineties, there seemed to be a huge surge among soft drink companies to have “instant win” prizes underneath the bottle caps. I, personally, had an epic run of 4 free Sprites in a row. I just had to present my cap to a retailer and I received a free soda for “winning.” In recent years, soft drink companies now require imbibers to take the extra step of getting a code from underneath the bottle cap and then entering it online. My question: What has the financial impact been for these companies? I imagine that these corporations have saved lots of money by counting on the fact that people don’t really feel like getting online to try to win a free drink. Is this true? If so, how much money have they saved?

I would love to hear ya’ll’s take on the economics of houesitting. Rates vary generally between $20-$50/day, depending on the # of pets, etc., but never does the rate approach minimum wage, since you are watching the house all day. But, on the other hand, you usually don’t have to do much, just make sure the pets are fed and that the house doesn’t burn down. Since it exists so far outside the normal scope of jobs (hours, compensation, etc.), I’d love to hear an economists take. What would you charge if you were to housesit? And what would you be willing to pay a housesitter to watch your house?

I’m trying to find the hidden side of circumcision. I’m wanting to write a paper on circumcision and if it has any effects other than the known medical ones. For example: do you have a higher probability of becoming a CEO if you are circumcised?

Society often gives incentives for good behavior. Recently I heard about a place that posts job salaries, so,etching very tabu to talk about. What if though the government created incentives for families and business to be debt free, or gave a seal of approval. So instead of materialistic things in society like a designer pursue or car people looked for this badge or incentive piece, and others saw that you had it. Do you think that would change the culture of American debt?

I would love to hear an episode dealing with the economics around high-end watches, such as the famous Rolex brand. What is the incentive for people to buy one? And how does the fact there are so many fake Rolex watches on the market impact this incentive?

One of the problems that alternative energy companies/solutions face is dealing with the rise and fall of energy prices. As is often the case, investments in clean energy or efficiency projects rise and fall respective to the price of oil. My question is, are there any financial strategies that alternative energy companies could employ so as to mitigate these shifts, or is the energy market too volatile? As I imagine, it would make more sense to lobby investors when oil prices are high, find a way to persuade them that construction will be put off until oil prices begin to decline, so as to stretch investment dollars. I believe that a company could seek less capital this way and reduce the risk to investors and the company itself.

Do Males or Females tend to initiate a breakup more? If so, are there certain trends that apply to this (social status, race, age, etc)? I find this interesting now that Facebook has been around long enough to gather information from their relationship status option.

Have you ever thought of the economic impact jury selection has on the economy? Depending on how large of a city you live in, hundreds of people don’t go to work when they are called for jury duty, sit around a courthouse for hours, only to be told that they are not needed or selected . If you could calculate the impact they might have accomplished not spending a day at a courthouse , I think it would be a shocking statistic.